NYT Income Inequality Extravaganza
There must have been some kind of memo at the New York Times — not that one was needed — to gin up a Christmas-weekend campaign about income inequality.
Example No. 1. is a Frank Rich column yearning for 1956: "economic equality seemed within reach in 1956, at least for the vast middle class."
Or, if not 1956, then at least sometime before "the 1970s": "How many middle-class Americans now believe that the sky is the limit if they work hard enough? How many trust capitalism to give them a fair shake? Middle-class income started to flatten in the 1970s and has stagnated ever since."
Or, if not sometime before the 1970s, maybe 1982?: "nearly a quarter of the 400 wealthiest people in America on this year's Forbes list make their fortunes from financial services, more than three times as many as in the first Forbes 400 in 1982."
To his credit, Mr. Rich does include a paragraph acknowledging that "Many of America's more sweeping changes since 1956 are for the better." But it really says something about today's "liberals" that they are so nostalgic for this imagined past. When conservatives talk that way, they are accused, as in Senator Edward Kennedy's attack on Judge Robert Bork, of wanting to "turn back the clock."
As for the Forbes 400, does Mr. Rich really prefer the 1982 list to today's? Forbes reported back in 2002: "Thirteen percent of the 1982 list came from just three families: 11 Hunts, 14 Rockefellers and 28 du Ponts. This year: 1 Hunt, 3 Rockefellers, zero du Ponts."
The book excerpt begins with a complaint that in 1990, the Major League Baseball team with the most expensive roster spent three times as much as the team with the least expensive roster, while "Last season, the Yankees spent about six times as much as the Pittsburgh Pirates, who had the most inexpensive roster." The book excerpt doesn't note what we noted back during baseball season: "The Yankees didn't make it to the World Series this year. The New York team and their $206 million-a-year player payroll lost in the American League Championship Series to the Texas Rangers, who had a payroll of $55 million."
The excerpt goes on:
But the University of California experiment, as described, isn't an experiment about "inequality," it's about underpaying people. And as long as we're talking experiments, what about the Ronald Reagan-Jim DeMint candy-push up experiment?
The excerpt goes on: "Ultimately, the question is this: How much inequality is necessary?" That's the question if you think the level of inequality can be centrally dictated rather than emerging as the result of many private voluntary choices by individuals — to buy a ticket to a Yankees game, to invest money with a fund manager with a strong track record, to buy a book by a bestselling author. In other words, that's the question if you think earnings are something that the state permits individuals rather than something that, as a starting point, belong to the individual as the fruit of the individual's own labor.
The excerpt goes on:
But as Alan Reynolds pointed out the other day, this is pre-tax, pre-transfer income, and the same OECD study says America has the most "progressive" — i.e., redistributive — tax system of the lot.
The excerpt goes on: "A third of the 2009 Princeton graduates who got jobs after graduation went into finance; 6.3 percent took jobs in government. Then the financial industry blew up, taking out a good chunk of the world economy."
And here I had thought the financial industry "blew up" before the 2009 Princeton graduation.
The excerpted book is called "The Price of Everything," which is a shame, because that is also the title of a really lovely Hayekian novel by George Mason University economics professor Russell Roberts, one of the guys behind the Hayek-Keynes rap video. I say it's a shame, because some people looking for Professor Roberts' book will probably buy the Times guy's by mistake and wind up doubly confused, first because they have the wrong book and second because the Times guy's book itself seems to be full of confused thought. But, on the other hand, maybe it will work out well, because some people looking for the Times guy's book will buy Professor Roberts' book.
Anyway, I could go on, but income inequality is one of those things where I get the sense that a lot of the people pressing the issue aren't really open to persuasion or data. They've decided it's a problem and that it has to be dealt with, preferably though government redistribution. It's actually kind of fascinating to watch just as an exercise in herd thinking, but if the policy recommendations actually get implemented, there's some danger that real damage might result.
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